Gold falls as investors focus on US inflation data

Spot gold was down 0.2% at $1,785.23 an ounce as of 0521 GMT. US gold futures were down 0.2% at $1,802.10.

On Monday, gold prices hit a one-month high last week, as dollar and Treasury yields bounced back after a rally prompted by Friday’s blockbuster US jobs report.

Markets await the US consumer price report for July, which will be released on Wednesday. Analysts expect annual inflation to fall to 8.7% from 9.1% in June.

“Investors understand that both the US and the global economy are facing significant challenges, but the focus will be on the question of how long the burden of higher rates will remain on the market,” said Clifford Bennett, chief economist at ACY Securities.

“Any surprising softening in US inflation numbers could well be the catalyst for a tremendous jump in the price of gold.”

Fed funds futures traders are now pricing in a 64.5% chance of another 75-basis-point rate hike US Central Bank’Next policy meeting in September to deal with rising inflation.

Although gold is seen as a hedge against inflation, high US interest rates have dulled the appeal of non-yielding bullion.

In July, where inflation would be in year one and three, US consumer expectations fell sharply, a New York Federal Reserve The survey showed Monday, showing that US central bankers are winning the battle.

During this, taiwan foreign minister China is using military drills launched in protest against the visit of US House Speaker Nancy Pelosi as a pretext to prepare for an invasion of the self-governing island, said China.

Spot silver was up 0.1% at USD 20.66 an ounce, platinum at USD 939.50 and palladium was down 1.6% at USD 2,195.42 an ounce.

With inputs from Reuters

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